Here's An Insane Chart Showing Just How Much The Fiscal Cliff Is Being Hyped

Here's An Insane Chart Showing Just How Much The Fiscal Cliff Is Being Hyped
Joe Weisenthal

As Calculated Risk (and many others) note, the term 'Fiscal Cliff' is a misnomer. The US economy is not going to fly off a cliff and implode on January 1 if we don't make a deal. There will be a drag due to higher taxes and lower spending, but much of that can and be wound back early in the year.

But the talk about the fiscal cliff has grown into a deafening roar, and here's proof that it's way out of proportion.

Matthew Fleury of Bank of America takes a look at the volume of articles mentioning The Fiscal Cliff and The Debt Ceiling:

As you can see, there's WAY more talk about the Fiscal Cliff than there was at the peak of the debt ceiling!

24. Nail, head

4. That's the play

No way the Rs will make any kind of deal in the next month that makes it worth extending them.

Let them expire, then put the onus on the insane clown posse (the House) to develop a bill to restore the cuts for lower income workers, with the Senate and President making it clear the higher rates will NOT be restored.

21. Here's the problem with that

You're talking about people who just don't give a fuck if the country does go off a cliff. If the GOP doesn't give a fuck if the nation's credit rating gets trashed, they don't give a fuck if a family with an average income gets a $2,000 tax hike and the damage that will be done to the economy.

The GOP's only interest is protecting the low tax rate of people like Rmoney. If they can't have that, they just don't give a fuck if the baby gets thrown out. And while the prospect of them paying a political price for such a move might be a silver lining, I just don't see it ever happening. They will simply tell their constituency that it was all the Democrats fault and their constituency will believe them because you're talking about people who already have a proven track record of believing whatever they are told no mater how much it flies in the face of reality.

11. The stock market can be manipulated too.

25. To some degree, yes

Probably not to the degree that some think, but even if it could manipulate the stock market to a large degree you still don't solve the underlying problem of why the stock market would take a nose dive in the first place.

You can't just take $560 billion out of the economy and expect minimal impact, and the problem is you're not just taking that money out of anywhere, you're taking that money out of some of the places where it has the most impact to both the short term and long term health of the economy at one of the worst possible times.

23. So sick of this!

When they win, they can do whatever they want, threaten to end the filibuster pass legislation without consulting the minority party, lose the popular vote yet govern as if they had a mandate. They can raise the debt ceiling seven times for Bush explode the deficit but suddenly it's the most important thing ever! Over and over again the people's will is totally ignored and the Democrats just cave in. I know a lot of the reasons they do are valid our system is supposed to depend on compromise, but enough is enough! They can drag us into a war the majority of the populace opposed, go back on every deal, gridlock the process with complete abandon get their asses handed to them in a general election but once again it is up to the Democrats to compromise, and we probably will. It's like giving a child who throws a tantrum what they want and calling it a grand bargain. They lost, the people are done with supply side idiocy, it doesn't take Paul Krugman's intellect or knowledge to realize that the trillion dollar hand out in 2000 (which they SWORE at the time would be temporary) did absolutely nothing it created nothing except a windfall of capital that was invested abroad in other economies which yield a higher rate of return than ours.
I'm tired of all the fuzzy spinmeistering from the media, you don't need a PHd in economics to see that when the 400 richest Americans increase their collective wealth by 200 billion dollars in one year it is an indicator that this "horrible" economy Mitt Romney ran around shedding crocodile tears for is only horrible to some, but actually quite beneficial to others. So now after a five to six trillion dollar handout to the plutocracy (because lets face it, the war in Iraq was a handout of no bid contracts reeking of pork) we have to pay for this debt for our "children" by throwing seniors on the street and forcing their relatives to pick up the bill? Bullshit and more bullshit.

26. Well this fiscal cliff is inextricably linked to debt ceiling

...as they appear to be occurring contemporaneously. There may be a lot of hype but it's the real deal. 600 billion of tax rises and cuts is about 4 per cent of US GDP. Major drag on growth if it comes to pass.

27. our media will beat this horse to death

28. Thank you. There is no "cliff".

It's not a cliff. It's a long downward slope. All these cuts and tax hikes will not occur immediately and all at once. They will happen over a period of at least a decade. This hype about a "fiscal cliff" is nothing but more fear-mongering in hopes that it will force the President's hand into giving these corporate assholes what they want: More tax cuts for the wealthy, an end to Social Security and Medicare, a withered, ineffective government with fewer regulations...

33. It sounds about as real as that "collapse"

of support for Obama after the first debate. Remember all those earnest pundits shaking their heads and looking at those scary polls? And then Obama won with the same plurality he had before the debates.

Frankly I don't believe that first debate made a dime's difference in Obama's popularity and I don't believe this "fiscal cliff" is anything more than a scare tactic.

35. Nor, do I.

I agree with you wholeheartedly. This "fiscal cliff" crap is just another attempt at scaring people into once again giving into the Grover Norquist cult, and giving more tax cuts for billionaires, and pumping more money into the Defense Department at the expense of Social Security, Medicare, Medicaid, and the rest of our government. I hope the President stands his ground this time.

39. Your appeal to authority doesn't support your assertion

From your own source, here is what Krugman says...

"...the looming combination of tax increases and spending cuts looks easily large enough to push America back into recession."

Itís worth pointing out that the fiscal cliff isnít really a cliff. Itís not like the debt-ceiling confrontation, where terrible things might well have happened right away if the deadline had been missed. This time, nothing very bad will happen to the economy if agreement isnít reached until a few weeks or even a few months into 2013. So thereís time to bargain.

What Krugman is saying is that while the confrontation isn't something that needs to be solved prior to implementation, it does need to be addressed relatively soon to prevent very serious consequences.

40. Yes, it needs to be addressed relatively soon.

I was not arguing that it doesn't. But, the negative effects of not dealing with the situation are not all going to happen immediately, i.e., it's not a "cliff". Again, most of the cuts would be happening over many years, i.e., a downward slope. So, yes. He DID make my point.

41. It just depends on your point of reference

If you consider a 10 year period, yes it is a cliff because many of the consequences will happen gradually over the next few months. If you consider a 1 year period, not so much.

You described it as a "long downward slope" which I took to mean a linear line from point A to B across a 10 year period. I wouldn't describe it that way and I'm not so sure Krugman would either. Most of the cuts, or at least the most significant of them will happen on January 1st if no deal is reached. Krugman is not saying this isn't true. He's just saying the impact from that won't be felt as quickly as the debt ceiling debacle.

The reason I'm not too worried about it is because $55 billion of the proposed cuts comes right out of the defense budget. As Krugman pointed out, the GOP's wagon is hitched to the military industrial complex. One doesn't go down without the other.

34. Of course it's back to a roar.

Is there any other beat the GOP marches to other than 'cut entitlements' ? Thank God Reid said that SS wouldn't be touched. I'm amazed at how many people don't know that it has nothing to do with the federal deficit.

36. Jiu-jitsu

The art of manipulating the opponent's force against himself rather than confronting it with one's own force.

That curve is nothing but opportunity. The more the public and press thinks it is real, the more Obama can make of this opportunity. He should be putting forward a solution that includes substantial economic stimulus, infrastructure rebuilding, investment in emerging industries, etc.

This is the biggest opportunity Obama will have in his second term. And understand he CREATED this moment. He arranged for the timing to happen such that immediately after the election we would have to confront the Bush tax cuts, the Sequester and the debt extension -- all at the same time.

37. The right is terrified by the defense cutbacks.

They just know that by January 2 the Soviet Union will invade the US and install Hitler as our new socialist leader and all white Americans will be sent to concentration camps where they will be forced to worship the satanic bible.